Fewer Insurers in the Marketplace: What it Means for Texas

Several insurers have announced plans to withdraw from the Marketplace in 2017, both in Texas and nationally. Aetna, United Healthcare, and Scott and White have each announced that they will not offer plans on the Texas Marketplace in 2017. Humana has indicated that it will exit some state Marketplaces, participating in 11 states in 2017 compared to 19 states this year. Humana hasn’t yet announced the specific states it will leave.

This year, 16 different insurers are participating in the Texas Marketplace. We know there will not be more than 13 participating in 2017.

Competition and Choice

There are two big concerns when losing insurers: whether there will be enough competition to help hold down premiums, and whether consumers will have sufficient choices. Texas has consistently had more insurers participating in its Marketplace than most states, but even today, we have regions of the state served by only one insurer. Blue Cross Blue Shield is the only insurer in the Texas Marketplace that offers coverage in every Texas county. Today there are 58 counties (23%) served only by Blue Cross Blue Shield. After the exits of Aetna, United Healthcare, and Scott and White, and assuming Humana leaves too, there will be an additional 27 counties that have only one insurer, bringing the total to 85 counties or 33%. The remaining 169 counties will have from 2 to 5 insurers (again, assuming Humana leaves Texas entirely).

The more urban areas of the state will continue to have multiple insurer options, as will many rural areas in the Panhandle, west Texas, and north central Texas which are also served by First Care today.

Long-Term Viability of the Marketplace

Not surprisingly analysts’ reactions to insurer exits have ranged widely—from predicting the end of Obamacare to remaining bullish on the future of the Marketplace. The Marketplace isn’t the first (and likely won’t be the last) insurance market that has gone through a period of instability. Most observers note that insurers and the government can and should take steps to help reduce volatility in the Marketplace.

While some insurers have lost money on their Marketplace business, others are doing well. Centene/Ambetter and Molina have indicated they are profiting and Cigna has announced plans to expand in other states (all three insurers currently participate in parts of Texas). Many analysts note that companies like Centene and Molina, which have a long history of serving low-income customers through HMOs in Medicaid, have fared much better with their Marketplace business than insurers that historically focused on job-based, commercial insurance with broad networks.

For Texans with Current Coverage in Aetna/United/Scott and White

If you have an Aetna, United, or Scott and White Marketplace plan today, that coverage will remain in effect through December 31, 2016. You should go back to the Marketplace this fall to shop for a different 2017 plan. (In fact all Marketplace enrollees should update their information with the Marketplace and shop plans each year, because options and prices change every year.) Some consumers will just be interested in finding the lowest premium. Others will need to do the research to ensure their doctor is in-network or their prescription drug is covered on alternate plans.

It’s hard to talk about what needs to be done next without expressing frustration about the hyper-partisan atmosphere around Obamacare that has essentially prevented any Congressional action to improve the law. There are several available and tested strategies to help ease volatility in markets where private insurers help deliver benefits. What we are still in need of are lawmakers who are able to approach access to coverage in a pragmatic manner that puts meeting the needs of consumers, particularly low-income consumers, ahead of politics.

Stacey Pogue joined the center in 2008. She focuses on health policy issues. Before coming to the center, she did health policy and research work with the Medicaid and CHIP Division of the Health and Human Services Commission and the Texas Department of Insurance. In 2010 and 2011, she was selected to serve as a funded Consumer Representative to the National Association of Insurance Commissioners (NAIC). Pogue earned a Bachelor of Science in Geography, summa cum laude, from Texas A&M University in 1997 and a Master of Public Affairs from the LBJ School of Public Affairs at The University of Texas at Austin in 2005.

1 Comment

Thank you for your article Stacey. This is the type of information that public and providers need to learn about the real situation of the Texas Health Marketplace now that these major insurers are pulling out. People need to know that they still have options in most Texas Counties like BCBS and smaller players like Centene/Ambetter and Molina. These small companies are known to provide good service to its members, and the new developments constitute an opportunity for them to expand and cover the people who will need coverage after December 31. It is unfortunate that the media outlets continue to cover these news as a result of faults of Obamacare instead of providing objective information and the options that are still available for the people in the Marketplace in Texas.